June 30, 2017

Amsterdam, The Netherlands - Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, today announced that it has entered into an agreement with Profound Medical Corp. (TSXV: PRN, OTCQX: PRFMF) to deepen the existing collaboration and increase the scale of its MR-guided High Intensity Focused Ultrasound (HIFU) business. As part of the agreement, Philips’ MR-HIFU business will be transferred to Profound, a leader in MR-guided ultrasound ablation therapies, while Philips will obtain a minority interest in Profound.

Philips’ Sonalleve MR-HIFU is a therapeutic device that is used in conjunction with real-time MR imaging and thermometry to enable focused, non-invasive ablation of diseased tissue. Sonalleve is CE-marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. Philips will continue to distribute Sonalleve for use in combination with its Philips Ingenia and Achieva MR imaging systems, and Philips will provide additional services to Profound including manufacturing of the MR-HIFU table and installation services. Philips is already non-exclusively distributing Profound’s TULSA-PRO® system, which is specifically designed for MR-guided prostate tissue ablation procedures.

“We strive to provide clinicians with a broad portfolio of targeted therapy solutions for the treatment of complex diseases such as cancer,” said Rob Cascella, Chief Business Leader Diagnosis and Treatment at Royal Philips. “We recognize the broader value MR-guided HIFU therapies can bring to clinicians and their patients, and we appreciate Profound’s strengths in the area of MR-guided ultrasound ablation therapy. We believe that the increased scale of the business as a result of the transfer of Philips’ MR-HIFU activities to Profound and the resulting enhanced close collaboration will accelerate the development of new clinical applications for this promising technology, while better serving the needs of our current and future MR-HIFU customers.”

“This agreement with Philips is in line with our commitment to invest in the powerful combination of real-time MR-guidance as the imaging platform and ultrasound as the energy source for delivering non-invasive ablative technology to clinicians and their patients,” said Dr. Arun Menawat, CEO at Profound. “At Profound, we envision a world where patients can undergo clinically effective procedures and return quickly to their normal lives. By leveraging MR-guidance and ultrasound to deliver incision-free, personalized, precise and cost-effective therapeutic solutions, I believe we are well on our way to realize that vision.”

As part of the agreement, Philips will obtain 7,400,000 Profound common shares representing a minority interest of approximately 12 percent based on the issued and outstanding Profound shares upon completion of the transaction. The agreement also includes a deferred cash payment that will depend on the achievement of future Profound revenue levels in the period up to and including 2020. The transaction is subject to customary closing conditions, including the relevant regulatory approvals, and is expected to close in the second half of 2017.

About Royal Philips

Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people's health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care. Philips' health technology portfolio generated 2016 sales of EUR 17.4 billion and employs approximately 70,000 employees with sales and services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter.

Forward-Looking Statements

This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about the strategy, estimates of sales growth, future EBITA, future developments in Philips’ organic business and the completion of acquisitions and divestments. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.